Filling the “Power” Vacuum in NIL Regulation

Seven months have passed since the NCAA lifted its rule that prohibited players from earning compensation based on Name, Image, and Likeness (“NIL”). During that time, many states rushed to fill the gap left by the NCAA to create some sort of governance within the new NIL market. (See NIL: Not [Necessarily] Incorporated in Legislation What Student Athletes Should Know). Because the market has been subject to various forms of regulations, the product has varied.  Many very talented, student-athletes are profiting off of their NILs. The concern  arising from a lack of universal regulation continues to cloud the future of NIL deals.

Recruiting will continue to stress the gaps in the current NIL market. Photo Credit: https://n.rivals.com/news/name-image-and-likeness-part-1-answers-to-biggest-questions

NIL Deals in Recruiting

This concern over a lack of universal regulation has come to a head with recruiting. More specifically, the ultimate fork in the road occurs when assessing whether NIL deals should be created to entice high school students, or transfer students, to enroll at a particular institution. Embedded in this issue is the fact that some states have more favorable NIL laws when compared to others, and thus naturally offer their resident institutions an “edge” in recruiting.

Recent comments from University of Alabama Head Coach Nick Saban illustrate this fork in the road. On February 2, 2022, Coach Saban held a press conference following the conclusion of the “early” signing day of major divisional college football. During the press conference, Coach Saban responded to a question regarding the new landscape of college football, and specifically the impact that Name, Image, and Likeness have had thus far.

Nick Saban on NIL Rules and Suggestions (6:27 – 8:30)

One primary takeaway from Coach Saban’s comments is his desire for a system where players choose a program because of the institution as a whole, the relationships within the program and the institution, and how a player can develop personally, academically, and athletically. This desire is in contrast with the idea of creating NIL deals for players solely to entice them to enroll in a particular institution.

Coach Saban’s response is important because it highlights the vision of a top head coach in one of the most powerful conferences within the NCAA. While an exact model to reflect Coach Saban’s view of NIL is unlikely, it ultimately provokes a further thought: How can regulation of NIL become more uniform?

Conference Power

One answer for consistency may come from the power awarded to conferences under the new NCAA Constitution. More specifically, the new NCAA Constitution presents a more decentralized landscape for college athletics, one where much of the power is now spread to its divisions, conferences, and member institutions. This includes an inherent opportunity for conferences to interpret and implement NIL regulations. For example:

The Divisions

Article 2 Subsection B (1):

“Each division shall have independent authority to organize itself, consistent with the principles of the Association. Each division is authorized to structure itself as it deems necessary, including creation of sub-divisions or creation of a new division and determination of membership eligibility for these new organizations, including the role of conferences. New divisions or sub-divisions must be self-funded by the originating division.”

The Conferences

Article 2 Subsection C (3):

Each division shall have the authority to determine the membership requirements for multi-sport and single-sport conference members and the role and representation of multi-sport conference members in the respective divisional governance structure.”

Article 2 Subsection C (4): All Conferences:

(b) “Must provide to student-athletes any conference policies for its licensing, marketing, sponsorship, advertising, and other commercial agreements that may involve use of student-athlete’s name, image or likeness.”

(c) “Shall comply completely and promptly with the rules and regulations governing the division enforcement process and shall cooperate fully in that process as a condition of membership in the Association.”

The Schools

Article 2 Subsection D (e): All members of the NCAA must:

“Each institution shall maintain written policies for its licensing, marketing, sponsorship, advertising and other commercial agreements that may involve the use of a student-athlete’s name, image, or likeness. Each institution shall provide such policies to student-athletes and make those policies publicly available.

Access New NCAA Constitution Here

Conference-wide regulation may be the first opportunity for “universal” regulation for NIL activity. Furthermore, conferences with the most power are in a position to generate the most influence.

For example, in the Fiscal Year 2020, the “Power Five” Division One conferences generated the following revenue:

  1. Big Ten – $768.9 million
  2. SEC – $728.9 million
  3. Pac-12 – $533.8 million
  4. ACC – $496.7 million
  5. Big 12 – $409.2 million
Photo Credithttps://www.gamblingsites.com/blog/betting-on-college-footballs-power-5-conferences-odds-analysis-and-picks-75015/

In addition, it should be noted that many projections indicate that with the addition of Oklahoma University and the University of Texas, and an ESPN television deal, the SEC will likely soon pass the NCAA as the biggest-earning college sports organization in America. (For context, this past January, the NCAA indicated that it had generated more than $1.15 billion in revenue in 2021.)

The power that conferences carry under the New NCAA Constitution is clear. Most powerful, of course, are the Power-Five conferences in Division I. Ultimately, Power-Five schools have the financial incentive of staying a part of their respective conferences and would then be required to follow any sort of conference-wide regulation.  Therefore, an answer to the fork in the road that NIL has created can begin with a Power-Five conference implementing its own “universal” set of NIL regulations.

Resources

https://247sports.com/Article/Power-Five-conference-revenues-fiscal-year-2020-Big-Ten-Big-12-Pac-12-SEC-ACC-165594608/

Sportico https://www.sportico.com/leagues/college-sports/2021/sec-revenue-nearing-ncaas-1234640251/

USA Today https://www.usatoday.com/story/sports/college/2021/05/20/power-five-college-sports-conference-revenues-slowed-covid-pandemic/5184848001/

ESPN https://www.espn.com/college-sports/story/_/id/33201991/ncaa-earns-115-billion-2021-revenue-returns-normal

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President of the Buffalo Sports and Entertainment Law Society. Before law school, I coached college football at the University of Rochester for five seasons. I am excited to take these experiences, along with a legal education to make an impact on the ever-evolving landscape of college athletics. Thanks for reading our posts!

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